With their lower rates, term life insurance policies can be an attractive choice for families living on a budget. However, there are instances in which it may make sense to purchase a whole life insurance plan instead of the cheaper alternative.

Here are five reasons you may want to select whole life coverage.

1. You have a family history of chronic or serious illness

Term life gives you coverage for a limited period of time. When the term is up, you have to renew your policy. If your health has deteriorated or you are diagnosed with a serious illness, you could find yourself paying significantly more or, even worse, be uninsurable.

Whole life policies offer guaranteed coverage that can't be canceled so long as the premiums are paid. While no one can predict the future, if chronic health conditions run in your family, it may be wise to consider permanent, rather than term, coverage.

2. You are older

Of course, to get the best life insurance quotes, the best time to shop is when you are younger. Both term and whole life policies will be more expensive for older applicants. However, to avoid future increases, whole life with its fixed premiums may be your best bet.

In addition, while you may qualify for term life insurance now, consider how old you will be at the end of the term. Depending on your age at that time, you may find you are unable to renew at affordable rates.

3. You want fixed life insurance rates

Individuals with term life insurance may find their premiums increase substantially when it comes time to renew. Meanwhile, whole life policies have fixed premiums that are generally guaranteed not to increase. If you are concerned about the future affordability of your life insurance premiums, a whole life policy may be the right choice for you.

4. You want a simple way to invest

One reason whole life policies cost more than term life is their investment component. Whole life insurance plans build cash value that can be used for future expenses such as college, retirement or home repairs.

Although critics contend there are better investment vehicles than a life insurance policy, whole life can make sense for those who are risk-averse and need an easy way to save. In addition, many whole life policies offer a guaranteed return on their investments, which makes long-term planning more predictable.

5. You want a life insurance policy that pays you annually

Since whole life insurance plans offer an investment component, they also offer the opportunity to receive dividends. These dividends can be paid out as cash or left in the account to accumulate interest. Although a nice perk, policyholders should be aware that dividends are not guaranteed.